Gov’t efforts to curb oil smuggling pays off

The government has significantly reduced oil smuggling in recent months, resulting in improved sales for local petroleum players, Pilipinas Shell Petroleum Corp. said.

Pilipinas Shell country chairman Ed Chua said since April, the company has noticed an improvement in sales, which was previously affected by smuggling.

“I must say we would like to thank and congratulate the government because since April and May and up to know, we have seen a significant drop in (oil) smuggling,” Chua said.

He said since April, Shell’s sales went up although he declined to provide specific figures.

“Starting April, we have seen increase in sales by doubledigits so that one is a clear indication that the government’s efforts to address smuggling is starting to pay off,” he said.

Oil companies estimate that between P20 billion to P30 billion are lost to oil smuggling every year.

Chua said addressing the problem could significantly level the playing field for both big and small petroleum players.

The Department of Finance, Bureau of Customs and Bureau of Internal Revenue have undertaken a campaign to curb oil smuggling and bring smugglers to justice on the back of complaints raised by the Big Three oil firms – Petron Corp., Shell and Chevron Philippines.

“One of this administration’s priorities is to combat smugglers directly, especially in high-risk commodities such as oil. We in the DOF and its attached agencies are using a proactive, information- driven approach to fight oil smuggling,” Finance Secretary Cesar Purisima said.

According to the latest data from the Department of Energy, Philippine oil demand amounted to 106.9 million barrels in 2011. However, current BOC data only records 67.6 million barrels of oil imported in the same year, signifying a discrepancy of 39.3 million barrels that is likely made up through smuggling, the finance department said.

As part of the DOF’s Run After The Smugglers (RATS) campaign, nine cases have been filed against oil smugglers since the start of the Aquino administration, with total dutiable value of products amounting to P38.68 billion.